Mortgages have been with us for a long time, but many Minnesotans still seem don’t fully understand how they work. No one can blame anyone, though; in real estate, what you know now could be obsolete tomorrow. Trends change, rates fluctuates, new needs arise, lenders adjust, programs evolve — unless you’re a home loan planner by profession, you’re not really expected to know the lowdown of today’s mortgage landscape.
Because one of the sought-after homes for sale in Edina, MN is absolutely a major decision, you don’t want to be guided by false information along the way. By all means, you should learn to separate facts from fiction early on and demystify every misconception that still circulates around today.
Here are some of them:
Bad Credit is a Deal-Breaker
Yes, it is arguably the most important quality you must have, but having a less-than-perfect credit score doesn’t make all loan products out of reach. Many lenders are more lenient to work with subprime borrowers. However, you may have to compromise by settling for a slightly higher interest rate and putting down a bit larger down payment.
There’s No Avoiding Closing Costs
In a nutshell, these are certain fees you have to pay the lender at the end of the transaction (time to close on your mortgage). The typical charges are for the appraisal, survey, attorney’s services, pest inspection, etc. — practically anything that has to be done in the entire mortgage process.
No-cost loans, however, take these fees out of the picture in exchange for a slight increase in your interest rate. This may help you save a considerable amount of money and reduce your out-of-pocket expenses.
But then again, you have to do the math first and study your situation to see if this product makes sense to you.
Home Ownership is THE American Dream
Many individuals are swayed by norms to take a mortgage way before they’re ready for the financial responsibility. More often than not, they end up owning an underwater mortgage and ultimately lose their home to foreclosure.
Home ownership may be the biggest dream you could realize, but you must be financially prepared and responsible for committing to this serious obligation.
Dispelling your misconceptions about mortgages instantly makes you a wiser borrower. While it’s difficult to completely understand the nitty-gritty of home loans, doing your due diligence can save you from huge troubles you’d regret later on.